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The Punjab & Haryana High Court presided by Justice Alka Sarin ruled that compensation for motor accident claims should not rely solely on minimum wage rates. In a case involving the death of a young mason in a tractor-motorcycle collision, the court dismissed the insurance company’s appeal challenging the awarded compensation exceeding Rs. 35.5 lakhs.

The court rejected arguments of contributory negligence and upheld the assessment of the deceased’s income based on Deputy Commissioner rates, citing precedent. Justice Sarin emphasized the need to consider the circumstances of the victim’s family particularly the young widow and minor children in determining adequate compensation beyond minimum wage benchmarks.


The New India Assurance Company Limited v. Pinki and Others
FAO-1176-2024 (O&M)
Punjab & Haryana Court
Coram: Justice Alka Sarin


  • The New India Assurance Company Limited filed an appeal against the award issued by the Motor Accident Claims Tribunal, Karnal which granted compensation exceeding Rs. 35.5 lakhs.
  • The case involved a 23-year-old mason who succumbed to injuries sustained after being hit by a tractor while riding a motorcycle.
  • The insurance company contested the award arguing that the accident was a result of contributory negligence and occurred in the middle of the road.
  • Additionally, it was argued that the deceased’s income was assessed based on the Deputy Commissioner rate for the year 2020 in the area.
  • The contention was that it should have been evaluated according to the minimum wages established by the State Government.


After considering the arguments presented, the Court observed that the issue of contributory negligence was not raised before the Tribunal nor was any evidence provided in this regard. Therefore, the Court rejected this argument. Regarding the second argument concerning the assessment of the deceased’s income based on minimum wages instead of the Deputy Commissioner rate, the Court referred to the precedent set in the case of National Insurance Company Limited v. Meena Devi & Ors. where the income was evaluated using the DC rates. The Court noted that this judgment was upheld by the Supreme Court, dismissing the Insurance Company’s challenge.

The Court emphasized the young age of the deceased’s widow who is also 23 years old along with the fact that the minor children have their entire lives ahead of them. While acknowledging that the compensation cannot fully compensate for their loss, the Court stressed the importance of providing adequate financial support to mitigate the family’s future difficulties. Justice Sarin considering the unique circumstances particularly the youth of the widow and children refused to intervene in the Tribunal’s award noting that there is no legal requirement to solely apply the rates prescribed under the Minimum Wages Act, 1948 and that it can only serve as a benchmark.


Justice Alka Sarin of the Punjab & Haryana High Court emphasized that while the Minimum Wages Act serves as a benchmark, it should not be the sole factor in determining compensation for claimants in motor accidents. She stated, “While the minimum wage notification is commonly used as a yardstick, it should not be the sole determinant of the compensation awarded to claimants. Courts must find a balance between the victim’s inflated and unreasonable demands and the opposing party’s equally untenable claim that no compensation is payable.”

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